Microsoft Word - I. van Rooy Treatise _Final_construction company’s objective in
South Africa?
company’s objective in South Africa?
By: Ignatius Johannes van Rooy
25021819
the Degree of BSc (Hons) (Construction management)
In the faculty of Engineering, Built Environment of
Information Technology
Study Leader
Declaration by student
I, the undersigned, hereby confirm that the attached treatise is my
own work and that any sources are adequately acknowledged in the
text and listed in the bibliography.
__________________________________________
Abstract
Construction be part of a construction
company’s objective?
Institution : Faculty of Engineering, Built Environment
and Information Technology
Date : October 2010
The construction industry in South Africa is not perfect and there are all kinds of
chronic problems like for example low productivity, poor safety, inferior working
conditions, waste and insufficient quality, and evaluation of the performance at site-
and project level. These problems also exist in other countries around the world. In
some of these countries (like Japan, America and some European countries) they
developed a new production philosophy, called lean construction, which was
developed to solve these problems.
The objective of this treatise is to investigate this process called Lean construction
to see what it is; how it is implemented; how its performance can be measured; and
what tools are used to execute lean construction in a construction company. The
sole point of this investigation will be to show that this new form of production
management should become part of a construction company’s objective, aim and
goal in South Africa and will not only help these companies to solve chronic
problems in a construction company itself but also on the different sites of the
construction company. This will not only apply for Construction companies in South
Africa but also for construction companies around the world.
TABLE OF CONTENTS
1.1 Brief overview ______________________________________________________ 1
1.2 The main problem __________________________________________________ 2
1.3 The sub problems __________________________________________________ 2
1.3.1 What is lean construction and is it a new concept?_______________________ 2
1.3.2 How will the performance of lean construction be measured in a construction
company? _______________________________________________________________ 3
1.3.3 How will lean construction be implemented in a construction company? ____ 3
1.3.4 What tools and methods are used to support lean construction? ___________ 3
1.4 The hypothesis _____________________________________________________ 3
1.8 Research methodology ______________________________________________ 5
1.8.1 Various textbooks on lean construction; _______________________________ 5
1.8.2 Scientific journals obtained from the UP library on the subject; ____________ 5
1.8.3 Electronic articles published on the Internet on the subject. _______________ 5
Chapter two _____________________________________________________________ 6
What is lean construction and is it a new concept? ____________________________ 6
Table 5- Contributory work distribution (Alarcon 1993)
CONTENTS PAGE
2.4 Principles of lean production ________________________________________ 10
2.5 Instruments used in lean production __________________________________ 11
2.6 Lean construction (also known as lean production in construction) _______ 15
2.7 Comparison between conventional- and lean production _________________ 18
2.8 Conclusion _______________________________________________________ 19
Chapter three ___________________________________________________________ 22
How will the performance of lean construction be measured in a construction
company? ______________________________________________________________ 22
3.4 Traditional combined with new tools to evaluate performance ____________ 30
3.5 Conclusion _______________________________________________________ 40
Chapter four ____________________________________________________________ 42
How will lean construction be implemented in a construction company? _________ 42
4.1 Introduction ______________________________________________________ 42
CONTENTS PAGE
4.4 Improve downstream performance ___________________________________ 49
4.5 Conclusion _______________________________________________________ 52
Chapter five ____________________________________________________________ 54
What tools and methods are used to support lean construction? ________________ 54
5.1 Introduction ______________________________________________________ 54
5.2 Principles of lean construction that affect the design of tools. ____________ 54
5.3 Requirements for tools used in Lean Construction ______________________ 56
5.4 Methods for reengineering business processes ________________________ 58
5.5 Method for planning and controlling material supplies at construction sites 61
5.6 Conclusion _______________________________________________________ 65
Chapter six ____________________________________________________________ 667
BIBLIOGRAPHY _________________________________________________________ 71
DATA (KOSKELA 1993). ______________________________________ 10
PHILOSOPHY (KOSKELA 1993). _______________________________ 19
__________________________________________________________ 32
TABLE 4- WORK SAMPLING RESULTS BY ACTIVITY (ALARCON 1993) 33
TABLE 5- CONTRIBUTORY WORK DISTRIBUTION (ALARCON 1993) _ 33
LIST OF FIGURES
Figure 1- Conventional and lean production: Focus of development efforts
(Koskela 1993). ............................................................................................ 19
1987). ........................................................................................................... 28
Figure 3- Interplay among authority, responsibility, and communications on
every work-face task on a large construction project (Sanvido 1988). ......... 29
Figure 4- Sources of reduced productivity (Borcherding et al. 1986). .......... 30
Figure 5- Evolution of work sampling results (Alarcon 1993). ...................... 34
Figure 6- GPM structure and knowledge inputs (Alarcon 1993). ................. 36
Figure 7- General performance model (Alarcon 1993) ................................. 37
Figure 8- Benefits of organizations (Alarcon 1993) ...................................... 38
Figure 9- Combined effects: Incentive plan, organization, and team building
(Alarcon 1993). ............................................................................................ 39
Figure 10- Stabilize the work environment (Ballard & Howell, 1994). .......... 43
Figure 11- Last planner planning process (Ballard & Howell 1994). ............ 43
Figure 12- Developing a weekly work plan (Ballard & Howell 1994). ........... 44
Figure 13- Results-oriented control (Ballard & Howell 1994). ...................... 45
Figure 14- Planned and actual performance of engineering, fabrication and
installation (Ballard & Howell 1994). ............................................................ 47
Figure 15- Expanded planning system (Ballard & Howell 1994). ................. 48
Figure 16- Wait to start, then go faster (Ballard & Howell 1994). ................. 49
Figure 17- Reduce flow variation, then start sooner (Ballard & Howell 1994).
..................................................................................................................... 50
1
1.1 Brief overview
Some of the chronic problems of construction are for example low
productivity, poor safety, inferior working conditions, waste and insufficient
quality, and the evaluation of the performance at site- and project level.
There are a number of ways to relieve these problems in construction, for
example, industrialization (prefabrication and modularization), computer
integrated construction, and the vision of robotized and automated
construction. Some of these solutions come directly from the manufacturing
industry, for example, the idea of industrialization and the computer
integration and automation.
At this time, there is a different development trend in manufacturing, the
impact of which appears to be much greater than that of information and
automation technology. This trend is based on a new production philosophy,
rather than on new technology, and stresses the importance of basic theories
and principles related to production processes. This new production
philosophy is called Lean Construction.
Lean construction is a new concept introduced into the construction industry.
It has been practiced in other countries for a couple of years but has not
entirely found its feet in the construction industry in South Africa.
Lean construction is a different method to make a difference not only in the
construction industry but also in the world. Lean construction is not only a
2
way to reform the way work on projects is performed but it is also “a way to
design production systems to minimize waste of materials, time, and
effort in order to generate the maximum possible amount of value”
(Koskela et al. 2002).
Research will be done on lean construction to see how new this concept is;
what lean construction is; how lean construction can be monitored and
measured; how lean construction will be implemented in a construction
company; and what tools and methods are used in the incorporation of lean
construction.
1.2 The main problem
The construction industry in South Africa and in other countries around the
world contains certain problems- low productivity, insufficient quality, waste
(internal and external to the company), and inferior working conditions. A new
concept or production philosophy, called lean construction or lean production,
has been developed to resolve these problems that exist in the construction
industry and in construction companies. It has not quite made its mark in the
construction industry or construction companies in South Africa. The main
problem can be stated as follows: Should lean construction become part
of a construction company’s objective in South Africa?
1.3 The sub problems
The following sub problems will be investigated in order to come to a final
conclusion:
1.3.1 What is lean construction and is it a new concept?
3
1.3.2 How will the performance of lean construction be measured in a
construction company?
1.3.3 How will lean construction be implemented in a construction
company?
1.3.4 What tools and methods are used to support lean construction?
1.4 The hypothesis
Sub problem 1:
• Lean construction is a way work is done to meet customer needs while
using less of everything. It comprises of a new project delivery system
that will be suited for any kind of construction project. Lean construction
will minimize waste on construction sites. Lean construction is a new
concept though it has been around for a couple of years, but has not been
implemented or fully been implemented in certain countries, South Africa
being one of these countries.
Sub problem 2:
should focus on (effectiveness, quality, profitability, innovation, etc). The
traditional models of project performance are in many ways obstacles to
improving construction productivity and offer only a limited set of
measures, however it can be used together with the new model to predict
and measure performance at the site and project level. Lean construction
will thus improve construction performance by using old concepts and
implementing new approaches to them.
4
• Lean construction can mainly be implemented by reducing the inflow
variation, stabilizing work flow, and improving downstream performance.
These three implementation strategies need to be incorporated together,
because they depend on the results of one another.
Sub problem 4:
• When developing tools for lean construction, there are certain
principles that need to be considered. There are two categories for the
tools that support lean construction: (1) tools that support
reengineering business processes, and (2) tools that support planning
and controlling business processes. The first tool (reengineering
business processes) that can be used in lean construction contains
two methods: (1) activity and cost analyses, and (2) accuracy and
delivery time analyses. The second tool (planning and controlling
business processes) that can be used in lean construction is a PC-
based software, called TOIMI.
1.5 Delimitations
The research conducted in this treatise is based on the construction industry
worldwide and has no further limits or delimitations.
1.6 Assumptions
5
1.7 Importance of the study
By understanding what lean construction is and what it entails can help
construction companies in the South African construction industry to realize
that there is a need to change their company’s objectives, goals, aims,
visions and philosophy towards this new philosophy. Lean construction will
help them to become a more efficient, sophisticated construction company
who cares about how they do business and the impression they leave with
their clients.
Once a construction company understands what lean construction is and
start to implement it in their management, they will immediately see a change
which is beneficial towards the company and it will not only improve the
company itself but will also change the way business is done in the whole of
the construction industry.
1.8 Research methodology
The treatise is based on information obtained from the following sources:
1.8.1 Various textbooks on lean construction;
1.8.2 Scientific journals obtained from the UP library on the subject;
1.8.3 Electronic articles published on the Internet on the subject.
6
What is lean construction and is it a new concept?
2.1 Introduction
A few well-known problems in the construction industry are poor safety, low
productivity, insufficient quality, waste, and inferior working conditions. With
manufacturing as a reference point and a source of innovation a number of
solutions and visions have been offered to reduce these problems in the
construction industry, for example industrialization, computer integrated
construction along with robotized and automated construction.
Another development trend in manufacturing is based on a new production
philosophy, rather than on a new technology, which stresses the importance
of basic theories and principles related to the production process. This new
production philosophy is called Lean construction/Lean production and
like current practice the aim is to meet client needs while using less of
everything. Lean construction differs from current practice in the sense that it
rests on production management principles, meaning the “physics” of
construction. The result will be to provide a new project delivery system that
can be used on any type of construction but is mainly suited for uncertain,
difficult, and fast track projects.
2.2 Historical overview of lean production
Lean production was developed by Toyota, led by an Engineer called Ohno.
He was a smart, sometimes difficult, person dedicated to eliminating waste.
The term “lean” was coined by the research team working on international
auto production to reflect both the waste reduction nature of the Toyota
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production system and to contrast it with craft and mass forms of production
(Womack et al. 1991). Ohno wanted to build cars to client order and not like
Henry Ford who focused on an unlimited demand for a standard product.
Efforts from reduce machine set up time to total quality management helped
Ohno to develop a simple set of objectives for the design of the production
system: manufacture a car to the necessities of a specific client, deliver it
instantly, with no inventory maintenance.
Waste is defined by the performance criteria for the production system.
Failure to meet the unique requirements of a client is waste, as is time
beyond instant and inventory standing idle (Howell, 1999). So to minimize
waste Ohno had to shift his improvement focus from the activity to the
delivery system.
Ohno and his team of engineers were familiar with mass production of cars
from their visits to the United States of America. He was not quite impressed
with the method they used, because where the US managers saw efficiency,
he saw waste. Ohno understood that “the pressure to keep each machine
running at maximum production led to extensive intermediate
inventories in other words waste of over production” (Howell, 1999).
Defects were built into cars just to keep the assembly line moving. The US
tried to minimize the cost of each part and car by keeping the machines
running and the line moving. Ohno created a system design criteria that
prevented sub-optimization and promoted continuous improvement, which
set a multi-dimensioned standard of perfection. This means that to meet
customer requirements, in zero delivery time, with nothing in the inventory
required tight coordination between the movement of each car down the line
and the arrival of parts from the supply chains. Rework due to errors was not
tolerated- it increased the time to manufacture a car from beginning to end
and it also caused unreliable workflow. If workflow is unreliable the
coordination of the arrival of parts would be impossible. Ohno even instructed
the workers to stop the line if there were any defective parts or products
8
coming from the upstream, because he recognized that reducing the cost or
increasing the speed could add further waste if variability was injected into
the flow of work by the “improvement” (Howell, 1999).
He created an inventory control strategy, which was developed to replace the
central push with a distributed pull. The pull helped to reduce work in
progress, which in turn tied up less working capital and decreased the cost of
design changes during manufacture.
production system information to everyone involved with production.
“Transparency” allowed people to make decisions in support of
production system objectives and reduced the need for more senior
and central management” (Howell, 1999).
According to Howell (1999) “As Ohno came to better understand the
demands of low waste production in manufacturing, he moved back
into the design process and out along supply chains. In an effort to
reduce the time to design and deliver a new model, the design of the
production process was carefully considered along with the design of
the car. Engineering components to meet design and production
criteria was shifted to the suppliers. New commercial contracts were
developed which gave the suppliers the incentive to continually reduce
both the cost of their components and to participate in the overall
improvement of the product and delivery process. Toyota was a
demanding customer but it offered suppliers continuing support for
improvement”.
Lean production will always develop and change but the basic outline will
most of the time remain clear. The production system must be able to deliver
a custom product instantly on order but maintain no intermediate inventories.
9
Thus, lean production (new production philosophy) is emerging and has been
practiced or partially practiced by major manufacturing companies in
America, Europe and Japan (Koskela, 1993).
2.3 Conceptual framework of lean production
According to Howell (1999) “the basic concepts of lean production are”:
• Identify and deliver value to the customer value: eliminate
everything that does not add value.
• Organize production as a continuous flow.
• Perfect the product and create reliable flow through stopping the
line, pulling inventory, and distributing information and decision-
making.
requirements with nothing in inventory.
Koskela (1993) went and did a deeper study and explained that “The core
concept of the new production philosophy is in the observation that
there are two aspects in all production systems: Conversions and
flows. While all activities expend cost and consume time, only
conversion activities add value to the material or piece of information
being transformed into a product. Thus, the improvement of non value
adding flow activities (inspection, waiting, moving), through which the
conversion activities are bound together, should primarily be focused
on reducing or eliminating them, whereas conversion activities should
be made more efficient. In design, control and improvement of
production systems, both aspects have to be considered. Traditional
managerial principles have considered only conversions, or all
activities have been treated as though they were value-adding
conversions. Due to these traditional managerial principles, flow
processes have not been controlled or improved in an orderly fashion.
10
We have been preoccupied with conversion activities. This has led to
complex, uncertain and confused flow processes, expansion of non-
value adding activities, and reduction of output value. Material and
information flows are thus the basic unit of analysis in the new
production philosophy. Flows are characterized by time, cost and
value”.
Thus, if flow processes were not so important in the past this would mean
that there would be a considerable amount of waste (non-value-adding
activities) in current construction. According to Koskela (1993) “there has
never been any systematic attempt to observe all wastes in a
construction process. However, partial studies from various countries
can be used to indicate the order or magnitude of non-value adding
activities in construction. The compilation presented in Table 1
indicates that a considerable amount of waste exists in construction.
However, because conventional measures do not address it, this is
invisible in total terms, and is considered to be un-actionable”.
Waste Cost Country
Quality costs (non-
External quality cost
(during facility use)
Lack of constructability 6–10% of total project cost USA
Poor materials
Excess consumption of
materials on site
value adding activities on
Lack of safety 6% of total project costs USA
Table 1- Waste in construction: Compilation of existing data (Koskela, 1993).
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2.4 Principles of lean production
There have been a number of principles that have evolved over the years in
the flow process. Sufficient evidence shows that the following principles will
significantly and rapidly improve the efficiency of flow processes, as
explained by Koskela (1993) they are:
• “Reduce the share of non value adding activities, also known as waste;
• Increase output value through systematic consideration of customer requirements;
• Reduce variability; • Reduce cycle times; • Simplify by minimizing the number of steps, parts, and linkages; • Increase output flexibility; • Increase process transparency; • Focus control on the complete process; • Build continuous improvement into the process; • Balance flow improvement with conversion improvement; • Benchmark”;
These principles in general apply to both the total flow processes and to its
sub-processes. They also define the flow process problems: complexity, lack
of transparency, and segmented control. Research shows that these
principles are universal and apply to almost any production process for
example physical production, informational production (design), mass
production, and one-of-a-kind production (Koskela, 1993).
2.5 Instruments used in lean production
Lean production is a combination of existing principles of management
techniques. These principles together try to avoid the waste of time, money,
equipment, etc. By simulating all the employees, the main focus can be on
productivity improvement and cost reduction. In other words, “let everybody
12
manage their own problems and don’t create new problems by managing the
problems of somebody else” (Melles 1994)! Lean production was developed
in Japan. There is a wide spectrum of techniques used in lean production but
the most important instruments used in lean production are defined by Melles
(1994) as:
“Many authors agreed that the instrument of multifunctional task-
groups is one of the most important instruments of lean production.
Instead of homogeneous task groups a multifunctional task group
produces a number of different products. This makes it possible to
produce a more complex or more completed product with one
production unit. It transfers the maximum number of tasks and
responsibilities to those workers actually adding value. In the meantime
an accurate response to market developments can be achieved by
flexible deployment of personnel (Womack et al. 1990). In
multifunctional task groups workers do not have to wait for each other.
It also does not give stocks. To achieve the principle of multifunctional
task groups, personnel have to be trained intensively in recombining
thinking and doing (Kenward 1992)”.
• Simultaneous engineering
“Today technology changes rapidly. This reduces the lifecycle of
products. For this reason a reduction of product development time is
essential. Simultaneous engineering can achieve this. By using
simultaneous engineering the design and manufacture of the product is
no longer separated, physically and time-wise, but integrated and
synchronized, through face to face co-operation between designers and
producers in a product development team. Direct communication and
co-operation can reduce the development period of products
significantly (factor 2 to 3). Simultaneous engineering reduces muda by
avoiding miscommunication between engineering and production.
13
Within simultaneous engineering also market research is incorporated.
This reduces the development of products which are not liked by the
clients”.
• Kaizen
“Kaizen is Japanese for permanent and stepwise quality improvement.
Kaizen stimulates personnel at all levels in a company to use their
brains to reduce costs. In fact Kaizen requires permanent new ideas for
cost reduction. In some cases this implicates a strict demand from the
management to all production units to create a new idea each week. A
good implementation of Kaizen implicates cost reduction and zero
defects in final products. It is obvious that Kaizen reduces muda (Imai
1993). Kaizen demands employee involvement”.
• Just-in-time deliveries
“Just-in-time is a concept for good-flow control. It stimulates reduction
of stocks of material by providing goods when and in the amounts
needed (Ohno & Mito 1988). Traditional good-flow oriented control
concepts are managing the stock. Instead, primarily short-term
decisions are made based upon the current demand for products. New
subassemblies are made only immediately before they are actually
needed. The ultimate result is that only extremely small subassembly
inventories are needed. Traditional inventory control is based upon
detailed scheduling techniques (demand for parts is ‘pushed’). With JIT,
the actual production of new subassemblies is initiated based upon the
demand for products which are really needed (the ‘pull’ approach).
Transparent production control (visual management) is important.
Stock of materials is seen as muda. The implementation of JIT needs
reliable production (zero defects) and good (and steady) relations with
suppliers”.
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• Long term relationships with suppliers (co-makership)
“The basic idea of co-makership is to create co-operation with your
suppliers (Womack et al. 1990). This means e.g.:
– Mutual technology transfer;
Long term relationship with suppliers stimulates a relation which is
founded on cooperation instead of conflicts. Disturbances in relations
cause muda”.
• Customer orientation
“The entire company must be focused on the client (Womack et al.
1990), internal as well as external client-supplier relations are very
important. Good communication with your client declines problems. As
a result this declines muda”.
• Information, communication and process structure
“Lean production demands a transparent organization (Koeleman
1991). A transparent and flat organization implicates better information
and communication, internal as well as external. A simple organization
structure makes it easier to communicate. A transparent organization
makes is easier to have an overview of consequences of control
actions. It is obvious that bad communication declines muda”.
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construction)
Lean construction accepts Ohno’s production system criteria, but how will
this apply in the construction industry? Many ideas have been rejected from
manufacturing, not only because the construction industry is different but also
because the construction industry is unique, very complex, has highly
uncertain environments, and there is a lot of pressure to time and scheduling.
As in manufacturing, the goal of delivering a project in a limited time,
minimizing waste, and at the same time meeting the specific requirements of
the client sounds like the objective of every construction project. According to
Howell (1999) “waste in construction and manufacturing arises from the
same activity-centered thinking, keep intense pressure for production
on every activity because reducing the cost and duration of each step
is the key to improvement”. There are improved ways to design and make
things, and Ohno knew and saw it.
Howell (1999:4) said that “managing construction under Lean is different
from typical contemporary practice because it”:
• Has a clear set of objectives for the delivery process,
• Is aimed at maximizing performance for the customer at the
project level,
• Applies production control throughout the life of the project.
Further research is done by Koskela and he found that there are barriers to
the implementation of the new philosophy in construction. Koskela (1992a)
found that “the most important barriers to the implementation of this
idea in construction seem to be”:
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diffuse the new approach have often been specific to certain
types of manufacturing, and thus not easy to internalize and
generalize from the point of view of construction;
• Relative lack of international competition in construction;
• Lagging response by academic institutions.
These barriers that are listed above are only of a temporary nature and they
can be overcome in time.
The existing form of production management in construction is resultant from
the same activity centred approach found in mass production and project
management. So, by assuming that customer value has been identified in the
design stage it aims to optimize the project activity by activity. The project is
first broken into pieces, design and construction, then these pieces are
assembled in a logical sequence and their time and resources are estimated
to complete each of the activities and by adding all of them together to the
project. Each activity is then further decomposed until it is assigned to a task
leader, foreman, or squad boss. They then control the activities and monitor
each activity against its schedule and budget projections. Projections must
be reported to the project level. If any of the critical activities (activities on the
critical path) are late or behind, efforts must be made to reduce the cost and
duration of the activity that is behind or the sequence of work must be
changed. Sometimes it is necessary to trade cost for schedule to work out
the best sequence to make progress. The problem with this method is that
the focus on activities conceals the waste that is generated between the
continuing activities due to the unpredictable release of work and the arrival
of resources that are needed at a specific time. Thus, current forms of
production and project management focus too much on the activities and less
17
on flow and value considerations (Howell 1999, Koskela 1992 and Huovila
1997).
The first concern in lean production is managing the combined effect of
dependence and variation and should also be the first goal of lean
construction. By managing the combined effect of dependence and variation
between activities is essential in order to finish projects in the shortest time.
As project duration is reduced and the complexity increased, the critical issue
for the planning and control system will be the minimization of the combined
effects of dependence and variation. Thus, lean construction must fully
understand the “physics” of production and the effects of dependence and
variation along the supply chains. In current practice we ignore the physical
issue and focus more on teamwork, communication and commercial
contacts.
Lean construction supports the development of teamwork along supply
chains and also shifting the burdens along the supply chain. This means that
while partnering (where representatives of each activity communicates
directly without relying on the central authority to control the message flow)
focuses on building trust, lean is about building reliability. Lean construction
also differs from physical production in the sense that lean tries to isolate the
different teams from variation in the supply chain by providing a backlog or
maintaining excess capacity in the team, thereby enabling speeding up or
slowing down as the situation dictates.
People in current practice say that they are helpless victims of fate when
faced with managing uncertainty on their projects and that uncertainty comes
in other activities that are beyond their control. But according to Howell
(1999) “Lean construction embraces uncertainty in supply and use
rates as the first great opportunity and employs production planning to
make the release of work to the next crew more predictable, working
within the crews to understand the cause of variation. The lean
18
approach assures that no contribution is made to variation in work flow
and to decouple when unable to control. Planning and control are two
sides of a coin that keeps evolving throughout a project. Where current
practice attacks point speed, lean construction attacks variation system
wide”.
In construction the administrative act, planning, releases work. So the key to
improving workflow reliability is based on improving and measuring the
planning system performance. This reflects the understanding of cause and
effect, but this is for another novel.
2.7 Comparison between conventional- and lean production
Koskela (1993) summarizes in the table 2 below the most important
differences between conventional- and lean production:
Conventional production
non-value-adding
activities
Focus of control Cost of activities Cost, time, and value of
flows
implementing new
technology
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Table 2- The conventional and the new production philosophy (Koskela 1993).
Koskela (1993) schematically illustrates in Figure 1 the results of
implementing the conventional- and new production philosophy:
Figure 1- Conventional and lean production: Focus of development efforts (Koskela
1993).
From the above it can be seen that conventional production is improved by
implementing new technology in not only value adding activities but also to
some extent in non-value adding activities. Lean production tries to attend to
non-value adding activities, because with time the cost of non-value
activities, which are not controlled, tend to grow. Thus, production becomes
more complex and prone to disturbances. Costs of non-value adding
activities can be reduced by measurements and applying the principles for
flow control. Value adding activities are internally improved and through fine-
tuning of existing plant/machinery. Koskela (1993) says that “the
implementation of new technology is easier in lean production, because
fewer investments are needed and the production is better controlled.
Thus, after the initial phase, increase of efficiency of value adding
activities should also be more rapid in lean production than in
conventional production”.
2.8 Conclusion
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In conclusion, lean construction is a new form of production management
that originated from the conventional production system in manufacturing
(Japan). Lean construction is a new production philosophy which stresses
the importance of basic theories and principles in the production system and
aims to meet client requirements while using less of everything. Lean
construction is suited to any kind of construction project, but mainly for
uncertain, complex and fast track projects. As can be seen in table 1 above,
waste does exist in construction companies and lean construction will reduce
this waste if the appropriate measures are taken and the new philosophy
implemented.
As highlighted by Howell (1999) the basic concepts of lean production are
clear. Koskela (1993:2) did a deeper study and explained that “The core
concept of the new production philosophy is in the observation that
there are two aspects in all production systems: Conversions and
flows. There are also different instruments (Multifunctional task groups,
Simultaneous engineering, Kaizen, Just-in-time deliveries, Long term
relationships with suppliers (co-makership), Customer orientation,
Information, communication and process structure) that can be used in lean
production as explained by Melles (1994).
Lean construction is different in some ways from lean manufacturing but they
both have the same goal which is the delivery of a project in a limited time,
minimizing waste, and at the same time meeting the specific requirements of
the client. Barriers do exist but they are of a temporary nature and can be
overcome in time. Lean construction supports the development of teamwork
along supply chains and also shifting the burdens along the supply chain.
This means that lean construction not only focuses on building trust, but also
on building reliability.
From table 2 and figure 1 it can be seen that the conventional production
philosophy and the new production philosophy shares some principles but
21
the new production is more improved in some ways. Basic principles are
modified.
Some of the essential features of lean construction include: a clear set of
objectives for the delivery process, meeting specific customer/client
requirements at the project level, designing of products and processes at the
same time, and production control of the product from the beginning (design
phase) to the end (delivery phase).
2.9 Testing of hypothesis
The hypothesis stated in chapter one stated:
“Lean construction is a way how work is done to meet customer needs
while using less of everything. It comprises of a new project delivery
system that will be suited for any kind of construction project. Lean
construction will minimize waste on construction sites. Lean
construction is a new concept though it has been around for a couple
of years, but has not been implemented or fully been implemented in
certain countries, South Africa being one of these countries”.
In testing this hypothesis, it can be said that the hypothesis was partially
correct as lean construction has been around for a couple of years. It is still a
new concept in certain countries but in theory it has been around for a few
years. Countries like Japan, America and certain European countries use the
new production theory. It has not been fully practiced or implemented in
certain countries, including South Africa, and thus making it “new” for them.
The hypothesis was also partially correct regarding the nature of lean
construction. It is more than just using less of everything, but in the end it will
reduce waste on construction sites.
22
in a construction company?
3.1 Introduction
Over the years it has been a challenge in the construction industry to
evaluate the performance at site- and project level. Most of these models and
procedures that have been developed to evaluate performance of a project
focus on either the prediction of project performance or on measuring. Some
of them limit their analysis to measures such as cost, schedule, or
productivity (mostly labour).
philosophies in construction requires the evaluation of new
measurements such as waste, value, cycle time or variability”. These
elements are defined by Koskela (1992) as:
• “Waste: Number of defects, rework, number of design errors and
omissions, number of change orders, safety costs, excess
consumption of materials, etc.;
• Cycle time: Cycle time of main processes and sub processes;
• Variability: Deviations from the target, such as schedule
performance”.
This means that the conventional/traditional model is not appropriate in
measuring such performance elements. But, old concepts with the
23
can be applied to measure those elements.
The problem with performance evaluation is the fact that it is a multi-criteria
one. Individual measures will not be equally weighted by two managers or
organizations and they will probably also not use the same performance
measures. Thus, the new model must not have the flexibility to include
individual organizational objectives in the evaluation process but also the
ability to examine the effect of changes in those objectives.
3.2 Elements of performance
The word ‘performance’ entails all characteristics of the construction process,
from on-site activities (productivity, safety, timeliness, and quality) to off-site.
Sink (1985) characterized performance in seven elements (effectiveness,
efficiency, quality, profitability, innovation, quality of work life, and
productivity), which management should focus on. Sink (1985) defined them
as:
1. Effectiveness: “A measure of accomplishment of the ‘right’ things: a)
on time (timeliness), b) Right (quality), c) All the ‘right’ things
(quantity). Where ‘things’ are goals, objectives, activities and so forth”;
2. Efficiency: “A measure of utilization of resources. It can be
represented as the ratio of resources expected to be consumed
divided by the resources actually consumed”;
3. Quality: “A measure of conformance to specifications. In construction
projects, quality has two dimensions: The first and overall one is that
of the completed project functioning as the owner intended; the
second concerns the many details involved in producing this result”;
4. Productivity: “Theoretically this is defined as a ratio between output
and input. According to the Bureau of Labour Statistics, a measure of
24
productivity is more specifically an expression of the physical or real
volume of goods and services (output) related to the physical or real
quantities of input (e.g. labour, capital and energy). In the context of
the construction industry, the output is the structure or facility that is
built or some component thereof. The major input into the construction
process includes workforce, materials, equipment, management,
energy and capital. Labour productivity is also a measure of efficiency
but, because of the labour intensive nature of construction, it is treated
as a separate dimension. Productivity is primarily measured in terms
of cost”;
5. Quality of work life: “A measure of employees’ effective response to
working and living in organizational systems. Often, the management
focus is on ensuring that employees are ‘satisfied’, safe, secure and
so forth”;
6. Innovation: “This is the creative process of adaptation of product,
service, process or structure in response to internal as well as external
pressures, demands, changes, needs and so forth”;
7. Profitability: “This is a measure or a set of measures of the
relationships between financial resources and uses for those financial
resources. For example, revenues/costs, return on assets and return
on investments”.
These definitions are examples of elements that should be used to describe
performance. In the construction industry only some of these elements are
used to measure performance which only reflects a partial picture. They
usually are profitability and productivity, which are necessary conditions for
the survival in the construction industry but not sufficient.
3.3 Current performance models
In the following sections we will see some of the current models and
25
methods, and their capabilities, used in research to try and explain the
different aspects of project performance. They are measurement models,
productivity prediction models, productivity theory factor models, conceptual
construction theory models, and causal models.
3.3.1 Measurement models
A Business Roundtable Report (BRA 1982) showed that there are no
reasonable measures of aggregate construction productivity available and
that new indexes and data collection procedures should be developed. Listed
hereunder are some of the main measurement models used today:
• Kellogg et al. (1981) proposed a “holistic model, called the hierarchy
model of construction productivity, that could be the basis of a
cognitive plan to solve the problems of pulling together all the diverse
elements of the construction industry and permit the ‘total study’ of
total factor productivity of the industry”. Alarcon (1993) explains that
“this model defines and measures the factors and elements that
influence construction productivity at each level of the construction
process; but the broad scope and simplistic form limit its application as
a site model for construction productivity. On the other hand, there is a
need for greater use of site productivity measurement systems that
may allow owners and contractors to monitor and improve
productivity”.
measure productivity on site and have developed recommendations to
use effectively these procedures to monitor and improve productivity”.
• Tucker et al. (1986) “have implemented a Petrochemical Model Plant
database to be used as a baseline measurement of productivity for the
industry. In the future, periodic updates of the database would help
assess the impacts of different actions on productivity”.
26
productive time and delays that takes place during the day.
• Activity models using work sampling techniques. This model
categorizes all the activities which were observed into productive,
supportive, or idle times.
Thomas (1990) has questioned the validity of some of these models that
measure construction productivity, because there were difficulties found in
the supporting assumptions which linked their result to construction
productivity.
3.3.2 Productivity prediction models
Over the years research has shown that there is no standard method for
predicting productivity of construction work. However, there are estimating
manuals that provide guidance to account for different conditions. Some of
these methods that are used are:
• Use data from existing similar work in one area and assume it is
directly applicable to a project in a new area.
• Some use a ‘gut feel’ factor based on an expert’s judgment.
Main variables to determine productivity according to Alarcon (1993) are:
• “Number of direct minutes available per hour”,
• “The characteristics of worker population” ,
• “And the rate of work during direct work times”.
There is also information available on the effects of different factors on labour
productivity (Dallavia 1952; Edmonson 1974; Neil 1982; Neil & Knack 1984).
27
They included a proposal to use factors like design, labour, availability,
location, and the weather. Then there are mathematical analysis techniques
that can be used like tables, graphs, and judgment in some cases where the
necessary corrections are made to the initial productivity to calculate the
predicted value. Adjustment factors based on similar models have been
developed by other authors (Brauer 1984; Lorenzoni 1978; Riordan 1986;
CORPS 1979).
3.3.3 Productivity theory factor model
The factor model predicts the average productivity during short periods when
there is a particular set of conditions. Thomas & Yiakounis (1987) said “the
work of a crew is affected by many factors that may lead to random and
systematic disturbances to performance”. Alarcon (1993) explains in
more depth how this Theory Factor model works: “The cumulative effect of
these disturbances is an actual productivity curve that may be
irregularly shaped and difficult to interpret. However, if these
disturbances can be mathematically discounted from the actual
productivity curve, one is left with an ideal productivity curve (Fig. 2).
This curve is a smooth one consisting of a basic performance
allowance, plus a component resulting from improvements in repetitive
operations. The shape and magnitude of the ideal productivity curve is
a function of a number of factors that reflect the site environment,
construction methods and constructability aspects. Based upon design
requirements and construction practices, it is theorized that this curve
can be established prior to commencing the work. If cause-effect
relationships are known, then actual productivity can be predicted as a
function of the number of units produced or as a function of time. The
model contains systematic, random and time-dependent variables”.
28
Figure 2- Factor model of construction productivity (Thomas & Yiakounis 1987).
Thus, the theory factor model can be used as a framework for quantifying the
effects of various factors on construction productivity, because it provides
procedures for collecting data on a daily basis and combining it with the data
from different activities to see the effect on the learning-curve. Procedures
will allow that the information already obtained together with collection of new
information for future research to develop a reliable mathematical model that
uses different approaches.
Sanvido (1988) developed “a conceptual model of the management
functions that are required to improve the productivity and performance
of site construction operations (Fig. 3)”. According to Sanvido (1988) “the
basic features of the model are: (1) definition of the basic tasks of the
crafts workers and the input resources required; (2) identification of
interrelationships between different functions involved in supporting
the field construction process and specification of rules to govern their
performance; (3) definition of the scope and boundaries of the on-site
construction process; and (4) categorization of external influences on
29
the construction process that are beyond the control of the site
personnel”. Figure 3 shows several of these concepts.
Figure 3- Interplay among authority, responsibility, and communications on every
work-face task on a large construction project (Sanvido 1988).
This model signifies a structure of functions to be executed on a project.
Sanvido (1988) claims that “projects that function closer to the ideal case
specified by the model perform better in terms of schedule, cost and
quality than those which are further from the ideal situation”. The author
presents a methodology that can be used to improve the productivity of
construction projects. It will serve both planning and monitoring roles by
permitting comparisons between the ways responsibilities should actually be
assigned on a project.
According to Alarkon (1993) “Borcherding et al. (1986) provide an
interesting qualitative model to identify causes of reduced productivity
in construction work as shown in Figure 4. Productivity loss on large
30
complex construction projects is explained using five major categories
of unproductive time: (1) waiting or idle, (2) travelling, (3) working
slowly, (4) doing ineffective work, and (5) doing rework. The reason why
the crafts workers produce less output per unit of time is relegated to
one of these basic non-productive activities. The activities are affected
directly or indirectly by several other factors. The diagram illustrates
the complexity of the interactions of the numerous factors that affect
productivity”.
Figure 4- Sources of reduced productivity (Borcherding et al. 1986).
3.4 Traditional combined with new tools to evaluate
performance
In this section research is done by illustrating two examples of a traditional
and new model to evaluate performance in construction. First example is at
the construction site where the measurement technique of work sampling is
used to measure waste and detect opportunities for improvement. The
second example is at the project level where a new performance modelling
31
technique is used to evaluate the impact of management actions on the
performance of a project. These examples are explained by Alarkon (1993).
3.4.1 First example- measuring waste at the construction site
“This example is based on the work sampling technique that measures
time engaged in various activities (Thomas 1981). Work sampling has
been used as an indirect measure of productivity but is considered, at
best, a surrogate measure of productivity since there is no measure of
output. Two assumptions are made to link work sampling results to
labour productivity:
1. It is assumed that reducing delays and waiting time will increase
productivity;
2. It is assumed that productive time is related to output and
productivity.
construction operations (Thomas et al. 1990) and work sampling has
been almost dismissed as a model to measure construction
productivity. Nevertheless, Maloney has proposed the use of work
sampling as a tool to determine the presence of ‘organizationally
imposed constraints’, within a framework for analysis of performance
(Maloney 1990). The experience of several years carried out by a
professional team from the Catholic University of Chile (CUCH), with
more of 10,000,000 sq. ft. of building construction, has shown that work
sampling is an effective tool to promote improvement in construction.
The fact that there is no direct correlation between work sampling
results and construction productivity does not reduce its potential as a
diagnosis and measuring tool for performance improvement. This
technique can be used to measure directly different waste categories
that are necessary for continuous improvement. The work sampling
32
model used by the CUCH team focus on specific categories of
contributory and non-contributory work as a diagnosis tool to detect
sources of reduced performance and to measure improvement. Table 3
shows an example work sampling report used for this purpose. The
way this information is structured allows detection of otherwise difficult
to detect waste sources. For instance, Table 3 shows that carpenters
spend 24% of their time doing contributory work such as transportation
of materials; this is an important waste category that can be defined as
follows: ‘unskilled work performed by skilled labour’. The report
structure distinguishes among speciality crews’ activities and
locations, to help management to compare performance between crews
and work areas, facilitating identification of sources of reduced
performance.
Carpentry Helpers Steel work Concrete work
PW CW Idle PW CW Idle PW CW Idle PW CW Idle
26/07/93
(M-M)
67 19 15 13 56 31 74 21 5 62 14 24
28/07/93
(W-A)
54 25 21 39 33 28 58 23 19 69 19 13
29/07/93
(T-M)
62 22 16 42 39 19 70 20 10 62 14 24
02/08/93
(M-M)
53 32 15 14 61 24 65 28 8 63 26 11
Average 59 24 17 27 47 26 67 23 10 64 18 18
Old
average
52 25 23 24 49 28 68 16 16 54 9 37
PW= productive work; CW= contributory work. Table 3- Work sampling results by
speciality
Table 4 shows the aggregate result for activities.
33
26/07/93
(M-M)
28/07/93
(W-A)
29/07/93
(T-M)
02/08/93
(M-M)
Average 53 26 20 68 18 13 71 12 17
Old
Average
49 25 26 54 20 16 56 18 25
PW= productivity work; CW= contributory work. Table 4- Work sampling results by activity.
Table 4- Work sampling results by activity (Alarcon 1993)
Table 5 shows an analysis of contributory work by speciality, the number over the
diagonal is the current week average, and the number below is the previous week’s
result.
Specialty
Cleaning Instruction Measurement Others
new old new old new old new Old new Old new old
Carpenter 4 4 2 3 0 0 5 6 10 5 3 6 24 25
Helpers 20 20 12 12 14 5 1 3 0 0 0 0 47 49
Steel work 14 8 2 3 0 0 7 2 0 2 0 1 23 16
Concrete 7 7 3 1 0 0 3 1 3 0 3 0 18 9
Earthworks 5 5 4 4 0 0 3 3 1 1 0 0 13 13
Plaster 5 9 3 0 0 0 2 1 3 4 1 4 15 18
Stucco 5 9 3 0 0 0 2 1 3 4 1 4 15 18
Roofing - - - - - - - - - - - - - -
Electrical 18 7 0 20 0 0 0 0 0 0 0 0 18 27
Sanitary 0 0 15 25 0 0 0 0 8 0 4 0 27 25
Total 8 7 7 10 3 2 3 3 3 3 1 3 25 27
Table 5- Contributory work distribution (Alarcon 1993)
34
This type of information allows management to take actions and
monitor results for evaluation. Some examples of actions taken based
on this information are directed to remove ‘organizational constraints’
or ‘minimize waste’, for example: reduce travelling time by providing
portable showers or bathrooms, provide materials or tool storage next
to the construction site; modify site layout, provide unskilled workers
to support skilled workers; provide transportation crews to eliminate
travelling and transportation time, and many other practical actions to
reduce waste. Observation of the evolution of the different performance
elements over a period of time allows measurement of ‘variability’,
which has been suggested as a necessary measure for improvement in
construction (Koskela 1992). Figure 5 shows the graphical evolution of
the classical work categories for work sampling: productive time,
contributory work and idle time. In fact, the experience of the CUCH
team suggests that a correlation may exist between ‘variability’ in
productive work and construction productivity. It has been observed
that when variability is reduced in work sampling measures, better
productivity is reached at the construction site. This hypothesis is
currently under examination.
Figure 5- Evolution of work sampling results (Alarcon 1993).
Work sampling used as described plays the role of a sensitive monitor
of project performance. Even though it may not reflect productivity
35
levels, it is very effective in detecting changes in work conditions that
are usually associated with inefficiencies and waste sources. In this
way it helps management to immediately focus attention on problem
areas and provide information for decision making. Foreman Delay
Surveys (Tucker 1982) is another traditional tool that has been
successfully applied to measure waste in construction. They can
complement work sampling results to supply a more precise diagnosis
of the causes of delays and job interruptions and provide valuable
information to keep track of the improvement effort”.
3.4.2 Second example- General performance model (GPM)
“This is a methodology for evaluating performance at a project level. It
is a new tool, but it is partially based on concepts proposed in some of
the performance models reviewed in this chapter: causal structures,
simplified models, qualitative and quantitative relationships for
prediction of performance. The GPM was developed by Alarcón &
Ashley (1992), working with the Construction Industry Institute’s (CII)
Project Team Risk/Reward (PTRR) Task Force. It is a performance
modelling methodology for application to individual projects which
combines experience captured from experts with assessments from the
project team. The methodology consists of a conceptual qualitative
model structure and a mathematical model structure. The conceptual
model structure is a simplified model of the variables and interactions
that influence project performance. The mathematical model uses
concepts of cross-impact analysis (Honton et al. 1985) and probabilistic
inference to capture the uncertainties and interactions among project
variables. Project options such as organizational design, incentive
plans, and team building alternatives are incorporated into the model
knowledge-base. The GPM allows management to test different
combinations of project execution options and predict expected cost,
36
modelled using multiple performance elements defined by the user and
a flexible weighting procedure for evaluation” (Alarkon 1993).
3.4.2.1 Model Structure
“The simple model structure, shown in Figure 6, is used to capture, store and
link the special expertise of many different parties in the construction
industry. The modularization of the knowledge allows for independent
elicitation of knowledge from the most qualified experts in specific areas. The
model combines the client’s preferences, or weights, toward outcomes such
as schedule or budget with the special insight of the project team charged
with the design, procurement and construction of the facility. Important
project management expertise is drawn from CII experts who have judged
how the people can drive the processes toward improved performance.
Finally, the expertise of the specialists in incentives, or team building, or
perhaps partnering, is used to determine how such management actions
motivate people.
The model can evaluate execution strategies, individually and combined as
shown in Figure 7. Starting with the left-hand side of the model, each layer
37
represents a single option set such as incentives, team building or project
organizational structure.
Figure 7- General performance model (Alarcon 1993)
There are many alternatives and combinations of alternatives for each option set. A
specific incentive plan can be combined with a specific team building program and
choices among the other option areas to form an execution strategy. Following the
options there is a set of variables that is directly affected by project options; these
variables are called drivers. Each combination of alternatives within an option set is
assessed as to its probable impact on drivers. Drivers, in turn, propagate these
effects through interactions among themselves and with processes. Drivers include
the field labour constructing the project, engineering personnel involved in all design
and specification activities, the project management team, key operating and
maintenance individuals, and, of course, the client. One way to visualize these
people drivers is on the basis of to what degree they achieve their full potential and
have the maximum impact on quality or productivity.
The project processes included in the model mirror the typical time phases of a
project: (1) definition/feasibility, (2) design, (3) procurement, (4) construction, and (5)
start-up/operations. Assessments of how each process will likely impact each
outcome are made by the project team on a project specific basis. Direction and
magnitude of this effect are both assessed.
The right-hand side of the GPM shows a ‘combined performance’ box. This
measure is obtained by combining several performance outcome measures
using weights elicited from top management. The performance outcomes are the
true results of the model. The analysis approach developed allows for the
38
comparison of multiple objectives and the client organization’s top management has
the flexibility of determining and modifying these objectives by selecting new
performance measures. Example performance measures used in this study are
project cost, project schedule, the ongoing value or contribution of the facility to the
firm and the effectiveness with which the facility is placed into operation. The last
two performance measures are examples of new measures necessary for the
evaluation in the new production philosophies” (Alarkon 1993).
3.4.2.2 Analysis capabilities
“The computational scheme utilized within the model allows all possible execution
strategies to be compared on a relative basis. Preferred strategies are ranked either
on the basis of combined performance or on any single chosen criterion. Figure 8
shows a comparison of the benefits of different organizational structures for a
hypothetical project.
Figure 8- Benefits of organizations (Alarcon 1993)
Analyses can be extended to other options or to a combination of options for
the project. Figure 9 shows a comparison of strategies which combine three
options: organizational structure, team building and incentive plans. In
addition, sensitivity analysis can be performed for selected alternatives to
39
determine the robustness of any highly ranked strategy, and the drivers or
processes with greater impact. The causal structure can be reviewed in detail
to gain a better understanding of the performance impact mechanisms.
Figure 9- Combined effects: Incentive plan, organization, and team building (Alarcon
1993).
The outputs of this model are predictive, quantified comparisons of project
execution strategies in terms of the outcome measures and detailed
qualitative and quantitative explanations of the causal interactions. The idea
behind this model seems appropriate to evaluate project performance from a
general system analysis perspective, to get a better understanding of the
global effect of management actions. This modelling methodology can be
easily adapted to model project performance for continuous improvement. In
fact, Ashley & Teicholz (1993) have recently proposed to use this
methodology as a basis to predict the impact of project management actions
on industrial facility quality. The effect of project options such as project
organization, contractual conditions or data integration on a set of
40
quality/performance, could be evaluated using this approach” (Alarkon 1993).
3.5 Conclusion
These models that have been discussed can be applied when introducing the
new production philosophy in construction. It is important that the traditional
and the new developments meet each other halfway for performance
improvement. The examples that have been explained show that traditional
concepts and tools can be valuable supports in developing continuous
improvement efforts in the construction industry.
3.6 Testing of hypothesis
“Lean construction has specific performance elements which
management should focus on (effectiveness, quality, profitability,
innovation, etc). The traditional models of project performance are in
many ways obstacles to improving construction productivity and offer
only a limited set of measures, however it can be used together with the
new model to predict and measure performance at the site and project
level. Lean construction will thus improve construction performance by
using old concepts and implementing new approaches to them”.
The hypothesis is mostly correct, in that there are certain performance
elements which management should focus on. The hypothesis was also
partially correct in the sense that traditional models (measurement models,
productivity prediction models, productivity theory factor models, conceptual
construction process models and casual models) can be used to measure
performance in lean construction but there are however limits to the use of
these models in lean construction. That is why traditional models are
41
combined with new tools/models to evaluate the performance in construction
companies. They are: the measuring of waste at the construction site
technique and the general performance model (GPM) technique.
42
company?
4.1 Introduction
There are two main focuses in Lean Construction- firstly it is on waste and
the reduction thereof. Koskela (1992) revealed that there is time and money
wasted when materials and information are defective or when it idles. Thus,
the efficiency of the conversion process must be improved together with the
management of flows between the conversions. Consequently, the other
focus will be on the management of flows. This will be done by putting
management systems and processes into the spotlight with the production
processes.
Lean construction can be implemented on complex, fast track projects. To do
so there are a few steps that needs to be followed. The first step is to
stabilize the work environment (Figure 10) - by shielding the direct production
of each component from upstream variation and uncertainty. Step two is then
to reduce the inflow variation- which will be possible because of a shield that
is installed which makes it possible to move upstream in front of the shield.
And thirdly to improve downstream performance- which will be behind the
shield.
43
4.2 Stabilize the work flow environment
At every level of the organization decisions regarding- what work to do, in
what sequence, over what duration, and what resources and methods to use
takes place throughout the life of a project. Sometimes the planner creates
assignments that direct physical production. This is where the ‘last planner’
by Ballard (1994) comes in and takes place last in the chain, because the
output of his/her planning process is not a directive for the lower level
planning process, and only results in the production phase (Figure 11).
Figure 11- Last planner planning process (Ballard & Howell 1994).
According to Ballard and Howell (1994) “stabilizing the work environment
begins by learning to make and keep commitments. Last planners can
be expected to make commitments (will) to doing what should be done,
only to the extent that it can be done”. Thus, choose assignments from a
44
workable backlog meaning from activities that you know can be done.
Otherwise, the direct workers will inherit the variation and uncertainty of work
flow which will then result in a high percentage of non-productive time and a
de-motivated work force not willing to struggle through these difficulties.
There are two primary quality characteristics of the commitment level of
planning when selecting or choosing practical assignments. Ballard & Howell
(1994) expresses them as “weekly work plans” (figure 12).
Figure 12- Developing a weekly work plan (Ballard & Howell 1994).
Firstly the right sequence of work is selected- this is the work that moves the
project best towards its objectives. Sequencing is schedules developed to
coordinate work flow and production activities. They can be made by last
planners whom have knowledge of the working conditions and the
constructability thereof. Secondly the right amount of work has to be
selected. Schedule directs the capacity of the amount of work that the labour
and equipment uses.
45
The last planner commitment level is the first level to be added to the planner
system. This shields the direct workforce from upstream variation and
uncertainty (Figure 13).
Ballard & Howell (1994) summarizes shielding as “selecting only
assignments that can be successfully completed, assignments for
which all materials are on hand and all prerequisite work is complete”.
Benefits of shielding (Ballard and Howell 1994):
• Injects certainty and honesty into the work environment;
• do what you say you are going to do (at least on a weekly basis)
and suppliers do the same;
• no blind pressure for production;
• commitment towards learning and improving;
• promotes accountability;
executing at the foremen level;
• confusion and ambiguity are minimized;
• non-productive time is minimized;
• Costs are minimized on time spent waiting on something to work
with or moving to alternative work.
46
4.3 Reduction in flow variation
Considerable variations take place at every step in the construction process.
Plans change all the time and materials are mostly late, delayed or not
available. When time is of the essence, variation becomes critical and even
more apparent as it shows the interdependencies between all the activities.
Once the shield to improve downstream operations is in place and the work
environment is stabilized through adjusting the planning system, it becomes
probable to reduce variation in flows.
Variation is a reality in delivery of any project. A major aspect of Lean
Production Theory is to respond positively to this variation. Ballard and
Howell (1994) explain that “buffers between operations are an important
tool because they allow activities to proceed independently. Variations
in output from upstream operations do not limit the performance of the
downstream operation. Buffers can serve at least three functions in
relation to shielding work by providing a workable backlog:
• To compensate for differing average rates of supply and use
between the two activities;
• To compensate for uncertainty in the actual rates of supply and
use;
activity.
As valuable as buffers are, they are expensive, hard to size, and hardly
an optimal solution. The costs associated with buffers include storage
space, double handling, inventory management, loss prevention, buffer
fill time, and idle inventory. Buffers are hard to size because the actual
supply and use rates are unknown and they vary”. Ohno (1987)
recognized that buffers were not the best possible solution and warn
47
management about reliance on it. Like he said “you must drain the water
from the river to see the rocks, i.e. to find the uninhibited use rates we must
make it possible to work without interruptions”. Ballard and Howell (1994)
used the following example to explain the above:
“Figure 14 traces the planned and actual delivery of isometric drawings
from the engineer to the fabrication shop, the planned and actual
fabrication and delivery of pipe to the site, and the planned and actual
installation rates. Each stage except the last shows a high degree of
variation from the planned rates of provision. This project was built
under fierce time constraints. Even so, the installation contractor held
to their policy of not starting installation until 85% of the pipe,
structural steel and equipment was on site. They believe, and their
balance sheet supports, that they can work extremely efficiently and
quickly by waiting for the backlog to develop. Oddly, this company only
accepts lump-sum contracts so they will not be forced by the owner
into inefficient practices. Their policy is to avoid growth so they only
bid on enough work to keep their backlog nearly filled with ‘high’
quality projects. While the strategy works for this contractor, others
often proceed with work before a workable backlog exists”.
Figure 14- Planned and actual performance of engineering, fabrication and
installation (Ballard & Howell 1994).
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Plans change. The extent of this change/variation will depend on the different
situations of each project.
Figure 15 explains and sums up how to better understand the stages of the
expanded planning system (Ballard & Howell 1994).
Figure 15- Expanded planning system (Ballard & Howell 1994).
From the top, there are the certain obstacles to consider improving the
stability of the initial plan. Directives are in order to ensure that explicit project
objectives remain stable. Here and at every other stage control is
accomplished and variation minimized by cautious attention to the stability of
inputs. This is done by (Ballard & Howell 1994):
• Monitoring the basis for the plan: Identify key assumptions and
assign responsibility for monitoring of changes to specific individuals
so that any changes can be detected early on. The principle for
reducing in flow variation of a project is applied here.
• Test the objectives against means for achievement: Only when the
means of the objectives have been carefully examined can they be
fixed. The principle of matching ‘should’ with ‘can’ at the outset is
applied here.
To improve downstream performance actually means to look at the
operations of the project- improving the performance on construction sites.
There is a possibility to minimize the cost and time of operations on a single
order of 25-50%, but it isn’t easy to realize those increases in the actual cost
and time savings. Too many ‘man power’ on operations may cause failure to
balance flows. Lack of discipline in the planning and execution stage will
influence the attempts to implement improvements. Thus, stabilization of the
work environment is a requirement for operations improvement (figure 16).
Figure 16- Wait to start, then go faster (Ballard & Howell 1994).
Substantial improvement in operations and the potential in time and cost
savings can only be realized when the work environment is stabilized. Then
operations are further improved by reducing the inflow variation bringing
more benefits and opportunities into the system (figure 17).
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Figure 17- Reduce flow variation, then start sooner (Ballard & Howell 1994).
Phase initiation advances with the simultaneous decrease in delivery
variation and size of backlog required to initiate work without risk of
interruption. This also improves the optimum sequences that can be selected
and better matching of labour resources. It will be possible to change the way
work is done. This does not necessarily mean to turn away from planning to
execution. Consequently, planning must be extended further downwards in
the project phases, because planning addresses both process flow and
operations design. According to Ballard & Howell (1994) “in construction,
the effective point of intervention has proven to be the weekly work
plan, because that is where work is selected and commitments are
made, and the key to stabilization/reduction of uncertainty is improving
the ability to keep commitments through better selection of work to be
done”. Howell (1993) also highlighted that “planning goes on beyond the
selection of work to be done next week, often by foremen, sub-crew and
individual craftsmen as they produce assignments, daily plans and
work methods”. The planning system needs to be followed through its final
levels, reviewing and improving the plan quality at each of the different levels.
4.4.1 Identifying the variances
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The current approach, in the construction industry, is fundamentally flawed in
some respects towards the control of costs and schedules. Assumptions are
made on budget unit rates applicable to each component, and variances are
measured from these assumptions. This leads to false standards in the
assessment of performance by managers and foremen. Some of the
consequences that arise out these assumptions are (Ballard and Howell
1994):
short-term results, and the resultant focus on blaming rather than
analyzing; and
through the provision of reasonable goals; and
• Waste of craft supervision’s energies and time spent selecting
work and shaping reports so they appear to be working as
closely as possible to aggregate averages, and thus avoid
drawing fire”.
So, before work starts the decision must be made if the right work has been
selected in the right amounts given the work mix and conditions. The right
standard of performance for a week is done by plan execution. According to
Ballard & Howell (1994) “its measures are Percent Planned Activities
Completed (PPAC) and Planned Productivity. Budget unit rates are the
right standard of labour consumption for a project, and serve as means
of calculating and assessing PPAC and planned productivity. When you
shift your control focus to adjusted standards, variances can be
identified and can be analyzed using reasons why planned work was
not done, and you have a chance of improving performance and
avoiding repetitive errors. With the prevailing approach to controls, its
use of false standards and inability to identify variances, performance
improvement is accidental”.
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When the field planning system starts working properly- labour will be
matched with work to be done, planned productivity will be reasonable, and
the right work is done in the right amount. Focus is then turned on the
Percent Planned Activities Completed (PPAC) to identify when a
performance variance is due to either plan quality or to execute. Variances
are then assessed against the planned performance rather than the budget
unit rates providing a more efficient analysis of the variances. It also
improves accuracy, because it removes the incentives for crafts to move
man-hour charges around to reduce apparent variation. Thus, controls
should focus on improving PPAC, on-time resource deliveries, and matching
labour to resource deliveries. Control can now determine whether the total
project and its component parts are on schedule and within budget.
4.5 Conclusion
To conclude it is vital that construction companies learn how to manage in
conditions of rapid change and uncertainty because these conditions are the
norm for all types of construction projects. Lean construction offers concepts
and techniques to meet these challenges. Figure 10, earlier in the chapter,
demonstrate how this will be done. First direct production is shielded from
variation and uncertainty in the flows of directives and resources. Secondly
the flow variation is reduced. And then thirdly performance is improved
behind the shield- improving operations within managed flows. Ballard and
Howell (1994) state that “implementation of lean production concepts
and techniques in the construction industry is the way to the future, but
following that path requires letting go of traditional thinking”.
4.6 Testing of the hypothesis
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“Lean construction can mainly be implemented by reducing the inflow
variation, stabilizing work flow, and improving downstream
performance. These three implementation strategies need to be
incorporated together, because they depend on the results of one
another”.
This hypothesis was partially correct, in that to implement lean construction
there are certain steps that need to be followed (figure 10- stabilize the work
flow environment) and that step two and step three can only happen when
step one is completed. The first step is to stabilize the work flow (by shielding
the direct production of each component from upstream variation and
uncertainty), then the second step is to reduce the inflow variation (which will
be possible because of a shield that is installed which makes it possible to
move upstream in front of the shield), and then the final step is to improve
downstream performance (which will be behind the shield).
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construction?
5.1 Introduction
There are certain principles that need to be considered when designing tools
or choosing the correct tools to use in lean construction. These principles
originate from manufacturing and disputes have been made that they are not
applicable to the construction industry, but in fact some of them are
applicable to the construction industry.
The requirements of tools used in lean construction are divided into two
groups: (1) Tools that support reengineering business processes, and (2)
Tools that support planning and controlling business processes. The fir